DYAI: First Quarter 2022 Operational & Financial Results

By John Vandermosten, CFA

NASDAQ:DYAI

READ THE FULL DYAI RESEARCH REPORT

Dyadic International Inc. (NASDAQ:DYAI) released 2021 operational and financial results in a press release on May 12, 2022, subsequently filing its 10-Q with the SEC and hosting a conference call with investors.

Highlights for the first quarter and to-date include:

➢ Exclusive animal health license agreement with Phibro – February 2022

Presentations at multiple conferences – April 2022

➢ Government funding granted for Epygen to advance C1 COVID vaccine in clinical trials – April 2022

Publication of DYAI-100 toxicology data in journal – May 2022

➢ Collaboration agreement with cheese producing global foods company – May 2022

Financial results for the quarter ending March 31, 2022, compared to the quarter ending March 31, 2021:

➢ Revenues were $0.6 million, up 41% from $0.5 million and cost of revenues were $0.4 million in both periods. The increase in revenue and cost of research and development revenue was due to a number of larger research collaborations conducted during 2021;

➢ Research and development expenses totaled $1.3 million, down 26% from $1.8 million. The decrease was attributable to slowing activity levels by Dyadic’s contract research organization and pharmaceutical quality and regulatory consultants for pre-clinical and clinical development work. The decline also reflected a reduction in cGMP manufacturing costs;

➢ General and administrative expenses were $1.7 million, up 7% from $1.6 million. Higher expenses were attributable to an increase in insurance, business development and investor relation expenses;

➢ Net loss amounted to ($2.5) million compared to ($3.3) million. On a per average share balance, net loss was ($0.09) and ($0.12), respectively.

As of March 31, 2022, cash, equivalents and short-term securities totaled $17.4 million compared to $20.3 million at the end of fiscal year 2021. Cash burn was ($2.9) million compared with ($1.9) million in 1Q:21. Financing cash flows were minimal. Dyadic holds no debt on its balance sheet.

New Collaboration with Mozzarella Manufacturer Leprino Foods

A day prior to the earnings release, Dyadic announced a new collaboration with Leprino Foods Company to develop and manufacture a number of animal free ingredient products. The project is funded by Leprino for up to €3.6 million which will be allocated to developing proprietary production cell lines for manufacture of animal free food products. If certain productivity and activity thresholds are achieved, Dyadic will receive success fees. Commercialization fees will in the low eight figures will be paid upon commercialization and a royalties in the low single digits based on sales will be paid. Additional information related to the agreement is provided in the Form 8-K filing.

While the core focus of Dyadic is for development of its C1 platform in developing and manufacturing biopharmaceuticals, the company will take advantage of other opportunities that arise to enhance value to shareholders.

Leprino Foods started in 1950 in Denver, Colorado and matured to be a mozzarella cheese manufacturer with national and later global reach. The company was recognized as the largest supplier of cheese for pizzas in the United States in the 1990s. In recent years the company has further expanded into Asia and Latin America. With the shift away from animal-based foods and success from other animal-free products such as Beyond Meat we hypothesize that the collaboration intends to develop an animal-free cheese product.

Epygen Biotech COVID Funding

In mid-April, Dyadic announced that its partner Epygen Biotech, which had originally become a partner in October 2020, was granted government funding to support Phase I and II clinical trials of Epygen’s COVID vaccine candidate. The Indian government’s Department of Biotechnology has selected Epygen’s vaccine, which uses Dyadic’s C1 protein production platform, for funding to support clinical trials. The efforts are expected to develop vaccines that can address new COVID variants and produce 100 million doses per year at a cost of $2 per dose. Additional funding will be needed to support pivotal studies and Epygen is seeking to raise $26 million to support a Phase III trial.

Publication of DYAI-100 Toxicology Data

Toxicology data for Dyadic’s DYAI-100 was published in the journal “Toxicology Pathology” as reported in a May 9th press release. The data demonstrated a favorable safety profile and support further use in human trials. The study, entitled “Toxicity and Local Tolerance of a Novel Spike Protein RBD Vaccine Against SARS-CoV-2, Produced Using the C1 Thermothelomyces Heterothallica Protein Expression Platform” was published in Toxicologic Pathology. It summarized the toxicological evaluation of DYAI-100 conducted in the New Zealand White rabbit animal model. No signs of toxicity were observed, including the lack of injection site reactions. Thirteen days post-injection, ELISA studies revealed SARS-CoV-2 specific IgG antibodies were further elevated in the sera of the animals vaccinated. Histopathology evaluation and immunohistochemistry (IHC) staining revealed follicular hyperplasia, consisting of B-cell type, in the spleen and inguinal lymph nodes of the treated animals that were sustained throughout the recovery phase. One of the scientists working on the project, Dr. Abraham Nyska, finds that the observations in the model show a sustained immunogenic response against RBD. See link here for the original published article.

Phibro Exclusive License Agreement

On February 10, 2022, Dyadic announced an exclusive license agreement with Phibro Animal Health (NASDAQ:PAHC) to develop and commercialize an animal health vaccine for a Phibro targeted disease. Phibro is a leading global animal health and mineral nutrition company. The agreement was realized after previous proof of concept development work between the two companies. Under the terms of the agreement, Dyadic granted Phibro exclusive license to C1 to produce specific targeted antigens for a poultry vaccine in a disease of Phibro’s choice. Development work to find and develop additional vaccine candidates using C1 will continue. Phibro offers more than 25 poultry vaccines including Infectious Bursal Disease, Infectious Bronchitis and Newcastle Disease. Poultry vaccines are estimated to be a ~$2 billion market.1

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1. Poultry Vaccine Market Size, Share | Global Industry Report, 2019-2026 (grandviewresearch.com)

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